At the 2018 State Bar of Texas Annual Meeting lawyers from around Texas came to Houston to brush up on legal ethics, the latest technology, and practice management innovations. Practice management tips was a common topic throughout the conference with a variety of sessions taking a deeper dive into the subject. But, before learning how to make your practice a success, we attended a session all about how to start your own practice. Erich M. Birch, Joshua D. Massingill, Jessica Vittorio discussed the perks and pitfalls to starting your own practice. In case you missed out on this CLE session, we are passing along all the valuable information we learned from the panel of experts who have experienced these perks and pitfalls themselves. Below are 10 general areas of caution to be aware of when opening or managing a practice, as well as benefits and perks to opening or managing a practice.
1. Create a Business Plan
The first and most important thing to do when starting a practice is to create a business plan. You can’t start a business without a plan—a clear goal and how you will achieve that goal.
Creating your business plan can be the most rewarding and exciting part of starting your practice if you let it be. During this time, you get to determine who you are, what you practice, and why you’re a solo attorney. It should get you excited about your future as a solo. While your business plan is intended to put you on track and determine all the nitty-gritty details of your new business, it can also be a huge encouragement to succeed.
Your business plan isn’t set in stone. Don’t be afraid to rework your business plan down the road. If you’re looking to go in another direction, adjust your plan accordingly. Your business plan can be a fairly fluid document and should be reevaluated every year or two.
One of the first things you will determine when you open a new practice is your focus practice area. Make sure you are fully competent in the scope of your practice. Start with one or two areas of practice in which you have
The first disciplinary rule under the Model Rules of Professional Conduct is competency: “A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness
Here are a few ways that you can avoid violating this ethics rule:
- Do not advertise for services outside your wheelhouse.
- Learn to say no! Don’t fall into the temptation of working on something you’re not fully competent in just because a client asks.
- Seek an of-counsel attorney who is competent in a subject you are unsure about.
- Limit the scope of your representation in your attorney-client contract. Include it in your business plan “this law firm practices what?” “I will not do this…” if you have written it down and made it a part of your plan, you will have an easier time saying no.
3. Choosing Your Office Location
One of the perks and pitfalls of starting your own practice is that you can be flexible with location. You can work from anywhere: downtown, middle of the country, office sharing space, home, etc.
Before you choose a location, do your homework. Think about your firm’s primary focus and target demographics and how location could impact the success of your practice. Will you need to be close to the courthouse? Where are does your target demographic live? Is your location easily accessible? These are only a few of the questions you should ask yourself.
Co-working spaces can be a cost-effective alternative to renting an entire office space. Co-working spaces are great, especially when you don’t want to spend your day focusing on some of the administrative hassles that come with your own space. On the other hand, some co-working spaces can breach ethical rules and privacy. Does
The third option is working from home. This can be a great option if you are looking for flexibility. But, many people who work from home find it challenging to get a break from their work. It can be tempting to respond to every email after
4. Lots and Lots of Non-Billable Time
If you have ever worked for a large law firm, you may not realize all the things that go on behind the scenes. Many administrative duties are taken care of for you when you are a part of a large firm. Run out of paper? It’s covered. Wi-Fi goes down? It's handled.
When you decide to go out on your own and start a solo practice, you have many more responsibilities, and most of them are not billable. The number one pitfall that lawyers fall into is doing too many tasks that are not a part of practicing law. In Clio’s 2017 Legal Trends Report, they reported that the average lawyer only collects 1.6 hours of billable time per day. That means that the average lawyer is spending over 6 hours a day on administrative duties.
The reality is, you can’t do it all. The question is, do you hire a paralegal or an office manager or invest in practice management software? It’s tempting to keep your overhead costs as low as possible and choose not to do any of these things, but it does eventually eat into your time and money. You could be limiting your potential income. Hiring or gaining services to help with the administrative responsibilities can help your bottom line. It becomes a question of—are you building a business or operating as a service provider? You know how to practice law, but do you know how to run a business? As a solo practitioner, you are an entrepreneur.
5. Communication Is Key
The most common complaint clients have about lawyers is poor communication. In fact, 85% of malpractice cases are unintended and caused by poor client relationship and communication skills.
It is best to always err on the side of over communication. When you receive emails, make it a priority to respond within a few hours. Even if it is just to say, “I’ve seen your emails, but I don’t have time to respond at this moment.” By simply acknowledging that you have seen the client’s email, you are conveying the message that your client is important and you value their time. Creating a canned response for acknowledging emails in a simple way to consistently have good communication without having to take time away from your day.
Not communicating in an effective and timely manner can affect your client emotionally and in return, affect the client-attorney relationship and their perspective of you or your work. Nothing may have gone wrong with the case, but if they do not FEEL that it went well, then you and your firm are at risk of receiving a bad review or worse, a malpractice suit.
Email communication is the most common way clients will try to reach you, but what about clients that would prefer to use text message communication? When it comes to texting, it is all about personal preference. Before you decide if this is a means of communication that you would like to have with your client, think a little bit about who your target demographic is—do you think they would prefer to text? Will it improve or hinder your communication?
If you decide texting is a route you want to take with your clients, set boundaries. It can be a slippery slope if you don’t set expectations. Unless you want people texting you at all hours of the day or night, you need to set clear expectations for the hours you are available by text. Most importantly, stick to the communication methods that you are more comfortable with.
6. You Don’t Get a Paycheck Unless You Do The Work and Send Out an Invoice!
When you open your own practice, there are no more biweekly paychecks. To get paid, not only do you have to get clients, do the work, and send the invoice, but your client has to pay the invoice, and the check has to clear! This can be quite an adjustment, especially for a lawyer who is coming from a large law firm. There is no guaranteed salary. Therefore, it’s good to start with a little padding in the bank.
It can be easy to misjudge when you will invoice a client and get your payment. Your likelihood to get paid for something is immediately after the service. A week later, maybe, a month later… eh. Billing right away can ensure immediate payment.
7. Procrastination is Deadly
Just about every lawyer struggles with procrastination. In fact, about 95% of people struggle with procrastination. You know you shouldn’t procrastinate, and you know you should be more diligent about getting ahead of deadlines, so what’s stopping you? For some, it may because they don’t like the particular kind of work they need to get done. For others, it may be that the work makes them anxious, so they avoid it. It is imperative that you understand why you procrastinate before you try to fix the problem.
For almost everyone, a relatively simple fix is to put systems in place that will help you work efficiently no matter the project. Create a process that works for you, whether that means breaking up your work into smaller steps, creating detailed timelines, or taking breaks throughout the day. Your process should apply to almost every work scenario. Creating daily habits that increase your productivity will significantly reduce your procrastination.
When you start your own practice, you are working without the safety net of other people to help; therefore, procrastination isn’t an option. Procrastination is deadly when it comes to your new practice.
Flexibility may just be the biggest perk of going out on your own. As long as you get your billable hours to work out in the end, you can golf in the morning, or afternoon, or all day if you want! You are no longer confined to 9-5—you can work when you want, where you want, and for however long you want.
Although you have the freedom to make your own schedule, it is important to constantly marketing yourself and ensuring that you have enough business in the pipeline. It’s important to remember that your business is still a top priority. But, when you have a steady flow of business, it can allow you to do other things with your time. Flexibility to take vacations, spend time with family, and other things away from your practice.
9. Improved Quality of Life
When you have your own practice, you may find that you enjoy the practice of law more. You can design your own lifestyle and determine how you practice law. There are very few things as rewarding as building a business from the ground up and turning it into something you love. You may find even more happiness in the satisfaction your clients get from your work because its work that you wholeheartedly believe in.
When you are building your practice, be very intentional about how you design your firm and lifestyle. Start with the lifestyle you want and work backward from there. Creating a practice and a business that you are proud of can be extremely satisfying and make the practice of law even more rewarding.
10. You May Become Unemployable
Once you get that taste of freedom, it may be hard to go back!